“Ecuador issues world’s first Sovereign Social Bond, with the support of an IDB guarantee” – IDB – January 16, 2020

On January 16, 2020 the Inter-American Development Bank (IDB) reported that “Ecuador has issued a Sovereign Social Bond in the international market for $400 million, becoming the first country in the world to make this type of placement.

The issuance will serve to boost the government program Casa para Todos, providing access to decent and affordable housing for more than 24,000 medium- or low-income families. It will also mobilize approximately $1.35 billion in investments in the country’s housing sector.

This issuance is backed by a guarantee from the Inter-American Development Bank (IDB) for $300 million, making the operation highly attractive for international investors and reducing significantly financial costs for Ecuador.

The bonds proceeds will be used to provide mortgage loans at a preferential interest rate of 4.99% through the Ecuadorian financial system and a securitization scheme. The issuance is compliant with the Social Bond Principles of the International Capital Markets Association.”

You may read the news release on the IDB internet site.